HUGE! Total Cost of Coronavirus Shutdowns and Lockdowns Estimated at $34 Trillion – More than the US GDP!

The folks at the conservative website Grassfire put together their estimate for the costs of the shutdowns related to the coronavirus and the amount is staggering:

1. Loss of Stock Market Valuation

At the end of February, reports indicated the stock market lost $6 trillion in valuation based on a drop of the Dow Jones Average from a high of 29,551 to 25,429 in the first wave of coronavirus crisis slides. Until we find a site that states the total loss due to the coronavirus crisis, based on the $6 trillion slide, we are estimating the total loss as of 3/31 (with the Dow at 18,591) to be:

Stock market loss in valuation: $10.5 TRILLION

They say those are “paper losses” and the market was “due for a correction.” Tell that to the retired couple depending on their stocks to live on during their retirement. Or the near-retirement age couple that just saw the goal of retirement fade away.

2. Direct Losses to the Economy (Lower GDP)

On March 20, Goldman Sachs drastically lowered its U.S. economic projections and is now expecting that that U.S. GDP will contract by 3.8% this year, as opposed to the projection at the outset of the year of 2% growth. It took America about three years to get back to the level of GDP output after the 2008-2009 recession. Based on this data, we project the LOSS in GDP due to the coronavirus crisis:

Direct Losses to U.S. Economy (GDP) $2.39 TRILLION

3. Loss of Jobs/Wages

The U.S. Federal Reserve of St. Louis is projecting the possibility of up to 47 million lost jobs (32.1% unemployment), which is far greater than the Great Depression (24.9% unemployment)

But what’s the cost? One study after the 2008-2009 recession found that losing your job during that recession cost the person $112,000 over the next 25 years. In today’s dollars, that’s $135,000. Using this estimate, that means the COVID-19 economic shutdown cost U.S. workers:

Losses in wages to unemployed workers: $5.264 TRILLION

4. More deficit government spending

All the emergency stimulus efforts of Congress are simply adding to the piles and piles of debt. So the added debt is a real cost that someone will have to pay. At some point, we will pay in a devaluation of our dollars. In the long run, we’re saddling our children and grandchildren with an impossible debt burden.

And what is the U.S. cost? One estimate says the global spending bill from coronavirus will be $10 trillion. Here’s what we know about the cost of the U.S. coronavirus spending bills:

• Phase One: A paltry $8.3 billion
• Phase Two: No one knows; one estimate is $100 billion (also called “chump change” in D.C.).
• Phase Three: Not yet passed, but the original number of $1 trillion was mocked so the Senate went for $2 trillion, and the House just upped the ante to $2.2 trillion
• But wait… the Phase Three stimulus actually created an additional $4.5 trillion in borrowing through a “helicopter credit drop” (a manipulation to give the govt. more borrowing power).

Which gives us a total of $6.81 trillion, so far. (Phase Four is coming.)

But wait! Since we will never pay that money back (the deficit only grows), let’s add in 30 years of interest, at say 2.5%, and we get a grand total of:

Total cost of new deficit spending: $14.28 TRILLION (and counting)

Adding up all these costs up, we come to a grand total of:

Total equals ….   $32.434 TRILLION

That’s more than the entire annual GDP of our country!

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